however, in my case, my server public ip address is provided by google cloud compute.
So who am i supposed to go to for this record? It appears from what i am reading that it is google. However, the above error i am getting doesnt make any sense.

Am i enterring the PTR domain incorrectly? (what format should it be enterred in the Google Cloud Console?)

From the other stack exchange post i have referred to on this topic, it appears that i need to set google nameservers for this to work. Is this true?

If question 2 above is "yes", my server is in Australia. The dns latency is over 100m/s which is terrible.My current dns provider latency is around 12m/s. I dont want crap dns latency...is there a workaround?

I see two things. Is this a typo, or are you typing in mydomain.com and seeing an error that says mydomain.com.au? Additionally, PTR records are linked to hostnames not domain names. mydomain.com is a domain name. A PTR record would point to myhost.mydomain.com. There should be an associated A record in similar fashion.
– AppleodditySep 24 '18 at 3:09

At registrar/dns host, add dns records for server1.mydomain.com as well as adding the additional txt record given by google webmaster central

In google cloud compute public ptr one then can submit server1.mydomain.com

The reason why the alternate verification is needed is because server.mydomain.com isnt pointing at a website! (So http verification isnt going to work)

If your registrar isnt losted in webmaster central,scroll to bottom of list and choose "other", then follow the prompts.

As a final note, if the reverse dns ptr is pointing at just mydomain.com (instead of server1.mydomain.com) and the relevant dns records for server1.mydomain.com are not also added, the smtp test will still throw a reverse ptr error.